In an effort to raise additional funds to continue its operations, Nevada Copper (TSX: NCU; OTC: NEVDF) has agreed terms with its senior lender KfW IPEX-Bank and its largest shareholder Pala Investments for a loan of up to US$70 million by way of a new tranche extension to the existing senior credit facility with KfW.

The funding would be provided by Pala, with the potential participation of other lenders. Of the total amount, US$50 million will be committed to be advanced by the lenders (including the outstanding amount of the previously announced up to US$20 million promissory note provided by Pala). An additional US$20 million may be available for future draw by the company on an uncommitted basis.

Nevada Copper is in ongoing discussions with KfW, Pala and other lenders with the aim of executing binding agreements during the month of July 2022. While these negotiations are going on, the company plans to make further draws under the US$20 million promissory note from Pala in order to meet its immediate cash needs. If implemented, the proposed financing package will provide access to “significant further liquidity” for the company to maintain the assets at the Pumpkin Hollow underground copper mine, it says.

Pumpkin Hollow was the first copper mine to come online in the U.S. over the past decade. The underground mine is capable of producing 50 million lb. of copper annually during a 13.5-year mine life, but most mining activities were suspended at the beginning of the month.

Furthermore, the financing would allow Nevada Copper to pursue certain projects such as completing the dike crossing to gain access to the East North mining zone, the largest mining area within the underground mine. The company would be able to work on the Pumpkin Hollow open pit project, which it is advancing towards feasibility status, and to explore further financing and strategic options.

Additional details on the Pumpkin Hollow mine can be found at www.nevadacopper.com.

Copper is pivotal to the global transition to a clean energy future. The red metal is an essential ingredient for the electric vehicles (EVs), energy storage systems, and renewable energy technologies underpinning this transition.

However, declining ore quality, mine closures, and the absence of additional investment in new supply could lead to a shortfall of 16 million tonnes by 2040, according to global research and consultancy firm Wood Mackenzie.

The challenge is to find new supplies of copper to support the electrification of transportation systems and energy networks, particularly for the U.S., which is currently a net importer of copper.

“The world will need a lot more copper to support the move away from fossil fuels – and we are developing a potentially significant new resource,” says Steve Dunn, president and CEO of US Copper (TSXV: USCU; US-OTC: USCUF).

The company is focused on advancing its Moonlight-Superior copper project to the production stage and “could be a major new source of copper to help meet the rising demand from the green technologies sector and the infrastructure needed to support it.”

The 34-km² property lies within the Lights Creek copper district of Plumas County in northeast California, approximately 140 km northwest of Reno, Nev. The project hosts two past-producing underground mines, Superior and Engels, which produced over 161 million pounds of copper at a grade of 2.2% between 1915 and 1930.

Moonlight-Superior “has had over 500 holes drilled on it, with past operators spending around US$50 million in today’s money on the property,” says Dunn. “A historical resource estimate by the previous owner, Placer Amex, estimated a 4-billion-lb copper resource for the project, but we definitely have a lot more than that.”

The property, he adds, also benefits greatly from existing infrastructure. “It can be accessed year-round by a paved road, which also connects it with State Highway 89, about 11 km to the southwest, a power line runs 3 km to the south, and a rail line, 11 km to the southwest, connecting the project to a deep water port at Sacramento, about 240 km southwest. We also have a skilled workforce close at hand.”

Copper mineralization at Moonlight-Superior comprises sulphide and oxide resources hosted in three advanced-stage deposits – Moonlight, Superior and Engels – and several partially tested and untested exploration targets.

A 2017 mineral resource estimate for the Moonlight deposit estimated 228 million indicated tonnes grading 0.25% copper for 576,696 tonnes contained copper and inferred resources of 99 million tonnes grading 0.24% copper for 242,218 tonnes of copper.

According to Dunn, the estimate was based on drill results from a drilling campaign “that was still intersecting mineralization at the bottom of the deposit when the drilling was stopped, suggesting there is more ore beneath the current Moonlight resource.”

A preliminary economic assessment (PEA) for Moonlight in 2018 envisaged a mining operation with a 17-year mine life producing an average of 147,871 tonnes (326 million lb.) of copper concentrate per year for a life-of-mine production of 1.5 billion lb. of copper.

The early-stage study pegged initial capital costs at US$513 million, with US$71 million budgeted for contingency. Using an 8% discount rate and copper price of US$3.15 per lb., the after-tax net present value is estimated at US$237 million with an after-tax internal rate of return of 16.4%. The capital outlay would be paid back in 4.8 years.

The PEA “did not factor in the two other smaller, but higher grade deposits, Superior and Engels, which have similar mineralization to Moonlight, or numerous untested copper occurrences across the property,” says George Cole, a non-executive director with US Copper. Cole was previously vice-president of exploration of Cominco American until he retired in 2001.

“Further exploration success at Moonlight and inclusion of the other deposits and untested mineral showings, could significantly enhance the size and economics of the project.”

In addition, the oxide resources at Moonlight, he notes, were treated as waste material in the PEA, with Placer Amex estimating a historic resource of 11.1 million tonnes of copper grading 0.54% for the project’s oxide cap.

Cole says delineating an oxide resource for inclusion in the mine development plan “is also likely to boost the value of the project.”

This year, US Copper plans to drill about 3,000 metres at the Engels deposit. The drilling will target an approximate 240 metres by 120 metres by 213 metres envelope of open pit grade copper mineralization surrounding the historic underground Engels mine.

The mineralization was initially identified in underground drill holes during the 1915-30 mining operation, but was “too low-grade for an underground mine,” says Cole. However, he noted that more recent historical surface drilling encountered significant intervals of copper sulphide mineralization “that could be amenable to an open pit mining operation.”

According to Dunn, the company currently has around $2 million in the treasury and “will be more than enough to fund the proposed drill program, which we expect to start in the fall of this year.”

The preceding Joint Venture Article is PROMOTED CONTENT sponsored by US COPPER and produced in co-operation with The Northern Miner. Visit www.uscoppercorp.com for more information.

Canada’s Hudbay Minerals (TSX, NYSE: HBM) unveiled Wednesday a preliminary economic assessment (PEA) for its Copper World Complex in Arizona, which includes recently discovered deposits at the property as well as the Rosemont asset.

The document comes only two weeks after a U.S. court cleared the path for the company to proceed with its planned Copper World mine.

Hudbay’s other major copper project in Arizona, the larger and neighbouring Rosemont, which suffered a major setback in early May after a judge confirmed a 2019 ruling that halted the US$2 billion project on environmental grounds.

The company said Copper World’s two-phase mine plan has an after-tax net present value of almost US$1.3 billion and will generate an 18% internal rate of return, based on a copper price of US$3.50 per pound.

Total project capital costs included in the PEA are estimated to be US$1.9 billion for Phase I of Copper World, including US$572 million of owner’s costs associated with mining equipment, pre-stripping activities as well as all operating costs capitalized before the start of production, Hudbay said.

The Toronto-based miner said it did not believe any federal permits were required for the first phase of complex mine plan as it sits on private land, rather than federal land.

“The [Copper World] project is significantly de-risked and has the potential to nearly double our annual copper production while maintaining Hudbay’s first quartile cash cost positioning,” chief executive Peter Kukielski said in the statement.

The first phase focuses on a standalone operation with processing infrastructure on Hudbay’s private land.

The mine is expected to churn out up to 100,000 tonnes of copper a year over a 16-year mine life. These includes about 86,000 tonnes of copper from mined resources at average cash costs and sustaining cash costs of US$1.15 and US$1.44 per pound of copper, respectively.

Phase II would need a US$885 million investment to cover costs associated with the expansion of the crushing facility and flotation plant, to accommodate the higher sulfide throughput, as well as US$264 million of owner’s costs related to the construction of a new tailings’ facility.

The second phase would increase average annual copper production up to roughly 125,000 tonnes over the remaining mine life, including approximately 101,000 tonnes of copper from mined resources, Hudbay said.

Four pits

The Copper World Complex is planned to be a traditional open pit shovel and truck operation with a copper sulfide mineral processing plant and an oxide leach processing facility producing copper cathode, molybdenum concentrate, and silver.

The overall mining operation is expected to consist of four open pits in Phase I with two of the pits expanding onto federal land in Phase II.

Hudbay expects to advance a pre-feasibility study for Phase I of the Copper World complex in the second half of 2022, which will focus on converting the remaining inferred mineral resources to measured and indicated.

The firm expects to complete a definitive feasibility study on Phase I in 2023 and receive all required state and local permits for Phase I.

The development of copper mines is considered critical for the world’s transition to a greener economy, in which electric vehicles (EVS) and renewable energies will take center stage.

Copper demand is expected to grow as a result, with analysts warning the global industry needs to spend more than US$100 billion to build mines able to close what could be an annual supply deficit of 4.7 million tonnes by 2030.

Integra Resources (TSXV: ITR) has released results of drilling at its DeLamar gold-silver project in southwestern Idaho, targeting the bulk-tonnage resource at Sullivan Gulch, the eastern portion of the deposit.

Delamar is host to a historic mine of the same name previously owned by Kinross. This open pit and underground operation lasted for over 100 years, during which it produced a total of 1.6 million oz. of gold and 100 million oz. of silver until its closure in 1998. Since then, no exploration took place on the property. Approximately 1,575 historic drill holes and 145,940 metres of drilling have been outlined in the project database.

Integra acquired the DeLamar mine in 2017, and the program at Sullivan Gulch was intended to further define a high-grade gold-silver feeder system, in conjunction with the bulk tonnage resource. The War Eagle, Florida Mountain and Black Sheep targets at DeLamar also have future potential for expansion.

The Sullivan Gulch exploration results comprised two drill holes, one of which intersected highest-grade silver intersected to date on the project: 4.1 g/t gold and 446.92 g/t silver over 26.97 metres, including 80.4 g/t gold and 14,054 g/t silver over 0.4 metre. Also included in the interval are 13.47 g/t gold and 1,909.45 g/t silver over 5.63 metres, and 40.74 g/t gold and 2,839 g/t silver over 0.76 metre.

This result, as Integra says, confirms for the first time the presence of a new, northwest-trending structural zone hosting high-grade gold-silver dipping to the northeast. All previous drilling at Sullivan Gulch targeted a north-northwest structure dipping to the southwest, suggesting these new intercepts may represent a new, high-grade feeder system that has not been previously encountered.

“As a potential new high-grade discovery, these results announced today further underscore that resource upside is not at all capped, but in fact further enhanced by results such as these shown today, as a large measure of today’s intercepts reside outside of current resource limits and mine plans,” Integra’s president and CEO George Salamis commented.

In February, Integra released a pre-feasibility study (PFS) on the DeLamar project, which outlined a two-stage heap leach and mill operation with an after-tax net present value of US$412 million and internal rate of return of 27% (assuming a base case scenario of US$1,700/oz. gold and US$21.50/oz. silver).

Annual production over a 16-year mine life would average 71,000 oz. gold and 3.1 million oz. silver, based on proven and probable mineral reserves of 123.5 million tonnes grading 0.45 g/t gold and 23.27 g/t silver, containing 1.8 million oz. gold and 92.4 million oz. silver.

“The immense value of the DeLamar project was recently highlighted in the February 2022 PFS resource estimate which included a large gold and silver resource. This resource base tied into a robust mine plan that demonstrated low-cost gold-silver production and a mining scenario that we believe can be permitted in a simple and straight-forward manner,” Integra president and CEO George Salamis said.

More details about the DeLamar project can be found at www.integraresources.com.

Mining and commodities trader Glencore (LON: GLEN) has settled probes into bribery and market manipulation in the U.K. and U.S., which have hung over the company for years.

The company, which in February announced it had set aside US$1.5 billion cover the costs of settlements in the U.S., U.K. and Brazil, confirmed on Tuesday it would appear in court in the U.S. today in connection with “proposed resolutions” to probes into its activities.

Later in the day, the U.K. Serious Fraud Office (SFO) charged Glencore with seven counts of bribery in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan. A London judge will sign off on separate penalties for Glencore at a sentencing hearing June 21.

In the U.S., the miner pled guilty to violating the Foreign Corrupt Practices Act, agreeing to pay a US$429 million fine and to forfeit more than US$272 million to U.S. authorities.

Over the past four years, Glencore has been under investigation by the U.S. Department of Justice (DOJ), the U.K. Serious Fraud Office (SFO) and Brazilian authorities for alleged money laundering and corruption. 

The Swiss company disclosed in 2018 that the DOJ had requested documents related to the group’s business in the Democratic Republic of Congo (DRC), Nigeria and Venezuela as part of a probe into possible corruption and money laundering.

Brazil also kicked off an investigation into Glencore and trading groups Vitol and Trafigura over alleged bribery of employees at state-run oil company Petrobras.

A year later, the U.K.’s SFO confirmed it was investigating suspicions of bribery by both the company and its staff.

The Swiss Attorney General followed suit, saying the probe was the result of a wide-ranging investigation by law enforcement agencies opened in early 2020.

Glencore, which is also subject to investigations from Swiss and Dutch authorities, has said the timing of those probes remains uncertain but would expect any possible resolution to avoid duplicative penalties for the same conduct.

International Battery Metals (CSE: IBAT; OTC: IBATF) has successfully completed the systems and safety testing for what would be the world’s first commercial-scale mobile lithium extraction plant.

The modular plant will now begin flow-testing with lithium-bearing brine, which has been sourced in the U.S. and is being trucked in. Once the efficacy and safety of the flow tests have been confirmed, International Battery Metals will begin extracting lithium chloride (LiCl).

The company expects extraction to begin in the coming days, becoming the first globally to successfully operate a commercial-scale mobile lithium extraction plant.

The unique modular design of the company’s lithium plant allows for rapid deployment and swift onsite assembly. The plant, located in Lake Charles, Louisiana, was assembled in 10 days by a crew of nine workers and has the potential to produce 5,000 tonnes of commercial-grade lithium chloride, on a lithium-carbonate-equivalent basis, each year. Thanks to its modular design, this same plant also has the potential to be expanded to produce up to 20,000 tonnes of lithium chloride per year, based on the capacity and unique composition of the brine resource.

“This modular plant represents a fundamental evolution of direct lithium extraction (DLE), with the clear potential to achieve commercial scale at a much lower cost than traditional extraction methods, while at the same time achieving vastly superior environmental performance,” John Burba, CEO of International Battery Metals, commented. “Our patented, proprietary technology not only allows for the rapid extraction of lithium chloride at high concentrations, but sets a new standard for environmental care. We’re thrilled to begin flowing brine through the system this week.”

International Battery Metals anticipates that its patented modular and mobile design will allow access and a means to capitalize on a more diverse range of lithium-bearing brine resources, including smaller sites in varied terrain that are currently considered uneconomical due to the conventional extraction technologies, which are larger in size, require more capital and time to build, and are more harmful to the environment.

“Our modular plant technology can be built, deployed and brought on-line in a fraction of the time of traditional lithium mining plants and at a fraction of the price,” Burba added. “This technology is the first of its kind, but it arises directly from the foundation of the initial DLE patents I filed with Dr. Bauman in the 1980s and 1990s, and commercialized through FMC in the 1990s. We are excited to be breaking the mold once again.”

More details on this advanced lithium extraction technology can be found at www.ibatterymetals.com.

Nevada Gold Mines (NGM) is investing in a 200-megawatt (MW) solar power plant designed to accelerate its decarbonization program, in line majority owner Barrick Gold’s (NYSE: GOLD; TSX: ABX) Greenhouse Gas Reduction Roadmap.

NGM has entered a partnership with Arizona-based First Solar to manufacture all modules required to support the 200 MW plant, entirely in the United States. NGM has already commenced detailed engineering, and expects to begin construction in the third quarter. The modules supplied by First Solar are expected to be delivered in the beginning of the second quarter of 2023 and will power both phases of the power plant.

Ensuring that the selected contract partner for this project fully supported NGM’s values was a top priority for the company, NGM stated. It chose to contract with a supplier who is committed to fair labour practices, investing in American manufacturing and American jobs, and is one which will deliver high-performance solar panels with the lowest carbon footprint and the best environmental profile available today.

Although this process has been time-consuming, it has allowed the company to optimize the project schedule to commission both phase I and phase II by early 2024, NGM said.

NGM is currently committed to a 20% carbon reduction goal by 2025. This will be achieved through the 200MW solar array construction and the conversion of its coal-fired power plant to cleaner burning natural gas.

“The project is the latest in a series of carbon-reducing initiatives across the group’s global operations,” says Barrick group sustainability executive Grant Beringer. “The solar power plant will complement the transition of NGM’s coal power plant to a dual fuel process, which will enable it to generate electricity from natural gas, reducing carbon emissions by as much as 50%.”

NGM is joint venture owned 61.5% by Barrick, with Newmont (NYSE: NEM; TSX: NGT) holding the remaining 38.5%. It is the single largest gold-producing complex in the world with a portfolio of 10 underground and 12 open pit mines.

For more on Barrick’s approach to sustainability, visit www.barrick.com/English/sustainability.

Constantine Metal Resources’ (TSXV: CEM) flagship Palmer property in southeast Alaska has been given a budget of US$17.98 million for its upcoming work program. Palmer is an advanced stage copper-zinc-gold-silver exploration project with road access and located within 60 km of the deep sea port at Haines.

The project currently hosts two NI 43-101-compliant resources, the Palmer deposit and AG Zone deposit, with a total consolidated mineral resource of 4.68 million tonnes grading 5.23% zinc,1.49% copper, 30.0 g/t silver, 0.30 g/t gold and 9.6 million tonnes of inferred resources grading 4.95% zinc, 0.59% copper, 69.3 g/t silver, 0.39 g/t gold.

The 2022 program will include plans for a surface exploration drilling program, continuing baseline environmental work, and preparation for the development of an underground incline (ramp) for future exploration and definition drilling.

As part of the preparation work for the underground exploration program, which is expected to start in mid-2023, the company will look to complete the final 1-km of the underground portal access road, construction of facilities for an updated wastewater design discharge system, as well as a 50 to 60 person camp to support exploration activities.

The surface exploration drilling program is designed to test for the offset of the large South Wall deposit, plus exploration targets including Terminus and Jasper Mountain that can be tested from surface and are readily accessible from the planned underground exploration development.

“This is the single largest Palmer program and budget, and it will set the stage to initiate underground exploration to provide essential technical information to be included in a future feasibility study,” Garfield MacVeigh, president and CEO of Constantine, commented.

The company’s joint venture partner, Dowa Metals & Mining, will fund the entire 2022 program. Constantine will not contribute to the funding of the program at this time, but has the option to pay its share of the 2022 program expenses.

Dowa Metals, based on Tokyo, Japan, initially earned into a 49% interest in Palmer with expenditures of US$22 million between 2013 and 2016. Last year, it increased the JV interest to 55%, with Constantine remaining as the project operator.

More details on Constantine’s upcoming plans can be found at www.constantinemetals.com.

Mining was one of few industries that saw relatively little disruption at the start of the global Covid-19 pandemic in March 2020. And although miners endured commodity price volatility, they enjoyed low or stable costs in the early part of the pandemic (remember the first-time-ever negative oil price of April 2020, when West Texas Intermediate went down to -US$37.63 per barrel?). 

Lower input costs — as well as cost control efforts by miners — led to record profits, share buybacks and beefed up dividends to shareholders. But inflation has returned. Last year, a combination of Covid stimulus funds, supply chain stresses, pent-up demand and a loosening of Covid restrictions pushed inflation rates in the U.S. to 7%, up from 1.3% in 2020. In January — before the Ukraine war started — U.S. inflation reached 7.5% — its highest level in 40 years. (The inflation rise has been more modest in Canada — from 0.7% in 2020 to 3.4% in 2021, but according to the World Bank, high inflation is widespread, with 15 of 34 countries classified as advanced economies experiencing 12-month inflation of above 5% last year). 

And then on Feb. 24, Russia attacked Ukraine — pushing commodities prices to record highs and fanning inflation higher. 

At the mine site, the costs of key inputs have risen dramatically from their 2020 pandemic lows, when Covid lockdowns caused a period of deflation. In a mid-March research report, Big Global Miners — 3 Big Issues: Growth, Future Portfolios & Costs, Bank of America highlighted a 350% rise in fuel (Brent crude); a more than 600% increase in sulphuric acid (in Chile); a 300%-plus increase in steel; and a 400%-plus increase in spot LNG in Europe from their lows two years ago to recent highs. 

While central banks are finally starting to raise rates to combat inflation (the U.S. Federal Reserve raised rates in mid-March by 0.25% to 0.5% — the first rise since 2018 — and the Bank of Canada did the same in early March), they may now be forced to move more cautiously to balance the added economic and political risk and uncertainty introduced by the Ukraine war. 

KEEP READING AT NORTHERN MINER

Excelsior Mining (TSX: MIN) (OTC: EXMGF) has released results of an updated prefeasibility study on the North Star Deposit of its Gunnison copper project and a preliminary economic assessment on the Johnson Camp mine heap leach, both situated in Cochise county, southeastern Arizona.

Gunnison PFS

Gunnison is designed as an in-situ recovery copper mine using solvent extraction-electrowinning (SX-EW) to produce copper cathode. The project is permitted to produce 125 million lb. of the product a year. First production occurred in late 2020.

Using a 7.5% discount rate and a life-of-mine average copper price of US$3.93/lb, the Gunnison PFS shows a net present value of US$1.35 billion with an internal rate of return of 44.9% after-tax.

Over a 24-year mine life, Gunnison is projected to produce 2.15 billion lb. of copper in three stages. Initially, it will output 25 million pounds of copper cathode per annum, followed by an intermediate expansion stage to 75 million lb. and a final expansion stage to full production of 125 million lb.

The project’s pre-production capital costs was calculated at US$45.1 million, which includes a 15% contingency, EPCM, freight, mobile equipment, owner’s costs and capital spares. Payback period for this pre-production capital is 4.8 years. The LOM operating costs were estimated at US$0.91/lb, while its all-in cost (LOM capital costs plus operating costs) was US$1.70/lb.

The PFS report is based on total measured and indicated resources of 873 million tonnes grading 0.29% copper (nearly 5 billion lb. copper) for the North Star deposit, as estimated in the 2016 feasibility study.

Probable reserves at the deposit totalled 782 million tonnes, again averaging 0.29% copper, for 4.5 billion lb. copper.

Johnson Camp PEA

The Johnson Camp mine has historically been an open pit, heap leach operation since Cyprus Minerals opened the property in the 1970s. The operation includes two open pits, a two-stage crushing-agglomerating circuit, a fully functioning solvent extraction-electrowinning (SX-EW) plant capable of producing 25 million lb. of cathode copper per year.

Excelsior is currently exploring re-opening the Burro and Copper Chief pits for open pit mining to produce run-of-mine material that can be placed on a new leach pad, as a means of extracting copper from the remaining mineral resources within the two pits. The PEA was prepared with respect to this planned re-opening.

The technical report shows total copper production of 65.9 million lb. from 34.4 million tonnes of ore mined (0.39% total copper grade) and 19.6 million tonnes of heap leach material over an approximate five-year period. At a 7.5% discount rate, the JCM operation would have an after-tax net present value and internal rate of return of US$7.8 million and 13.4%, respectively.

Initial capital for the new heap leach pad is calculated at US$26.5 million, while the initial mine capital is set at US$14.3 million.

“With the positive NPV result of the Johnson Camp open pit and heap leach PEA, Excelsior has an opportunity to increase copper production in the short to medium term with conventional mining and utilizing our existing solvent extraction infrastructure,” Robert Winton, senior VP of operations, stated.

The JCM plan has been developed with the expectation that it will produce leachable copper material and provide cash flow while the Gunnison project is being constructed.